3G spectrum: Government targets to complete auction by February 2014

PTA to start looking for consultant, auction to be open to new entrants as well.

ISLAMABAD: After formal approval by Prime Minister Nawaz Sharif the government has forwarded the policy directive for auction of next-generation technology spectrum to the Pakistan Telecommunication Authority (PTA) while instructing the regulator to remain vigilant on collusive bidding. The IT Ministry believes the auction process can be concluded by February 2014.

To encourage new entrants in the market and ensure level playing field, the government has made it mandatory for existing cellular operators to share infrastructure on a cost-sharing basis with new entrants as well as among themselves. The PTA will prepare guidelines in this regard.

The policy directive was approved by Prime Minister Nawaz Sharif on the recommendation of the advisory committee, constituted to review the previous policy directive issued in 2011.

With handing over of policy directives, the PTA is expected to immediately start the process of hiring a consultant of international repute. The PTA will advertise the requirements in the press under the Public Procurement Regulatory Authority (PPRA) Rules aimed at ensuring transparency in the process.

“Since the previous policy directive, the market situation has changed and requires empirical study which the PTA will commission,” said Anusha Rahman, Minister of State for Information Technology while talking to The Express Tribune.

On Monday, the Ministry of Information Technology forwarded the policy directive to the PTA. The minister of state Rahman said the auction will be conducted by the PTA in the least-possible time after the issuance of the policy directives. Though no specific deadline was given to the PTA for completing the process, the regulator informed the government that it could complete the process by February 2014.

The government had also finalised the terms of reference for the internationally-reputed consultant. According to the policy directives, the consultant will identify the number and size of the block to be auctioned considering the market situation. The Frequency Allocation Board has identified 30 megahertz (MHz) paired spectrum in 1.9GHz/2.1GHz band for auction.

However, the market expected that the PTA will offer three spectrums for auction this time again. Warid is already up for sale and if that happens, there will be only four telecom companies left that will likely bid for the spectrums.

But according to the policy directives, all existing cellular mobile operators as well as new entrants are eligible to participate in the auction. The new licence will be technology neutral and useable for technologies standardised for third-generation (3G) and advanced generation mobile services. The licence will be offered for a period of 15 years.

For optimal rollout of next generation mobile services, cost-based sharing of infrastructure will be considered as the first priority by the cellular operators at the time of the rollout.

However, the authority to finalise the reserve price rests with the government. Market expectation was that that government will get at least $400 million against every spectrum auctioned.

Published in The Express Tribune, October 8^th, 2013.

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